Energizing Arizona: Community Solar Can Inject Billions into the State Economy

By Landon Stevens
Note: This op-ed originally appeared in the Arizona Capitol Times on Nov. 15, 2022. The article can be found here. 

Arizona is on the verge of an economic boom if we can leverage one of our most plentiful resources: the sun. As the demand for clean, locally sourced energy grows across the state, so does the opportunity for an economic windfall in the form of solar jobs and development. 

APS, industry stakeholders, and the Arizona Corporation Commission (ACC) have spent the last six months hosting a series of workshops to develop a community solar program for Arizona Public Service (APS). This month the ACC will decide whether to follow through on establishing a community solar program and how such a program would be structured. This is an opportunity to bring new capital to Arizona while helping our residents reduce their energy bills and create local jobs. 

A recent study by professors at ASU looked at the potential economic benefits of community solar programs in Arizona and found that creating a program even half as large as the one under consideration at the ACC would result in over $6 billion dollars in economic benefit for Arizonans and would create nearly 4,000 jobs over the next decade. 

Not only should the ACC create a community solar program in Arizona, but it must also structure the program in a way that fosters real competition and allows outside investors to compete in our energy marketplace. Encouraging third party providers to deploy their own capital ultimately drives down costs for customers. 

Arizona residents who own their homes and can afford the upfront costs of installing rooftop solar panels have long taken advantage of the cost-saving benefits of solar energy. However, 77% of Arizona households are unable to install solar panels because they have low credit scores, have shaded roofs, or rent their space. 

Access to a community solar program would allow those households to share some of the benefits from the growth of solar energy in Arizona. These programs allow homeowners and small businesses to subscribe to a portion of off-site solar installations and save on their bills. 

Utility companies have little interest in promoting a competitive marketplace for locally produced energy. They are working to limit the size of these programs and reduce the potential for customers to save money on their energy bills. 

Third party developers currently have little incentive to build community solar projects because utility companies can refuse access to their grid system. As a result, community solar is not a choice for most Arizona families. The ACC has the power to change that. 

In states with community solar programs, participants save about 10% on their annual power bills. These savings would mean more money back in the pockets of Arizona families, which they can spend in local businesses and communities. 

But the biggest financial shot in the arm will come through job creation. Third party providers are eager to enter the Arizona market due to its business-friendly environment. Arizona believes in removing red tape, promotes free market competition in most sectors, and boasts a skilled, diverse, and talented workforce. These factors would make Arizona an attractive place for solar developers to invest their resources, if we can remove the anti-competitive limitations in the market. 

Solar accounts for 9% of Arizona’s total net energy generation. While that is more than many other states, the fact that we see 300 days of sunshine a year means we have room to grow – and opportunities for investment. 

The Arizona Corporation Commission has an opportunity to spark an economic explosion by opening a truly competitive community solar sector. If they do, they will power Arizona’s communities and energize our economy. 

Landon Stevens serves as the Director of Policy & Advocacy at the Conservative Energy Network.